John Gapper, the US-based chief business commentator at the Financial Times, launched a blog last week. One of his first postings deals with that well-known, and so very helpful, source, who pops up regularly in the FT and the Wall Street Journal: "a person familiar with the situation".

This anonymous source who has an insight into every boardroom, especially at times of crisis, never sleeps. He or she is capable of bi-location, turning up in New York and London at the same time. There is no company anywhere in the world that the fount of all financial knowledge, the person familiar with the situation, cannot penetrate.

Readers might find this baffling, writes Gapper, who I now quote in full:

Let us assume (rightly, I think) that reporters from the WSJ and the FT are professionals. That being so, they do not bother to talk to people who are ignorant of what is going on. Of course, their stories reflect what 'people familiar with the situation' - usually those most directly involved - tell them.

So what is the point of these circumlocutions? Usually, it suits the 'person familiar with the situation' best to talk without being quoted directly. It also makes it easier for him to spread disinformation without being caught out awkwardly later. The reporter seeking a story accepts a briefing on these terms as better than nothing.

As a journalist, I assume that when a story says that Mr X will do something, according to people familiar with the situation, that means that Mr X has been talking to the reporter himself but does not care to be quoted on the record. The 'person familiar with the situation' is similar to the 'friend of' the politician in Britain who discloses what he or she plans to do next.

But, if the reporter believes the facts to be correct, why not just report them without this recourse to vague attribution? The original blame, I think, lies with the US journalistic establishment, which insists on stories being sourced. Rather than a fact being stated baldly, it requires someone - even a person who is not named - to be identified as the source.

The American media virus has now spread around the world. Gangs of people familiar with the situation are roaming the world's financial media. I find it silly.

Silly! John is taking a big journalistic risk here. Will people familiar with the situation want to talk to him in future? But he is right to point the finger at US journalists. There were no people familiar with the situation in Britain a decade ago. On the other hand, there have always been anonymous sources, and we have always relied on them.

There wouldn't be many stories if people with inside knowledge did not give us off-the-record briefings. As long as they are truly familiar with the situation, then all is well. The problems occur when they are unfamiliar with the situation or when they do know the truth, but give us a wrong steer.

Most of the time, though, the system works. The unwritten contract between source and reporter relies on both acting responsibly, with the former telling the truth and the latter reflecting it fairly in print. Oh yes, and journalists must not invent people familiar with the situation to retail gossip and innuendo dressed up as an authoritative source.

What is certainly true is that the phrase itself is clumsy. Perhaps, over time, people familiar with the situation could turn into an acronym. So look out in future for stories that quote the all-seeing, all-hearing, whispering know-all called PFS.